Analysis of Changes in R&D Expense Ratio and Its Impact on Technological Competitiveness of Benxing New Materials

Based on publicly available information retrieved, this is a comprehensive analysis of changes in Benxing New Materials’ R&D expense ratio and its impact on technological competitiveness:

As a key enterprise in China’s PVC heat stabilizer sector, Benxing New Materials has established a relatively complete R&D system[1]:

• Qualifications & Recognitions
  : Awarded the titles of “Hubei Provincial Enterprise Technology Center” and “International Science and Technology Cooperation Base for Plastic Heat Stabilizers” in 2011
• R&D Platforms
  : Recognized as the “Hubei Provincial Engineering Technology Research Center for Polyvinyl Chloride Heat Stabilizers” in 2013; established an “Academician Workstation” in 2017; and was accredited as the “Hubei Provincial Engineering Research Center for Environmentally Friendly Plastic Modified Materials” in 2023
• Patent Accumulation
  : As of June 2025, the company has obtained 84 patents (including 37 invention patents), mainly applied to its core business[1]
• Industry-University-Research Cooperation
  : Maintains long-term cooperative relationships with universities and research institutions such as Wuhan University of Science and Technology and Sichuan University

The decline in R&D expense ratio from 4.55% to 3.11% may stem from the following factors:

• The company’s net profit was RMB 35.4087 million and RMB 39.1577 million in 2023 and 2024 respectively, showing a growth trend[2]
• The expansion of operating revenue scale may have led to a passive decline in the proportion of R&D expenses

• The company has improved R&D efficiency through the “internal R&D + industry-university-research collaboration” model[1]
• It has established a mature R&D team and talent development mechanism, which may have improved the output ratio per unit of R&D investment

• The company is advancing the R&D center construction project (total investment of RMB 200 million, construction period of 24 months)[1]
• During the construction of major R&D infrastructure, the proportion of expensed R&D expenditures may decline periodically

• The 84 patents accumulated through years of R&D form core technological barriers
• Established platforms such as provincial-level technology centers and academician workstations continue to play a role

• The company is advancing the RMB 200 million R&D center construction project[1]
• The R&D expense investment in 2025 remains within a reasonable range for the industry

• The technology update cycle in the PVC heat stabilizer industry is relatively long
• The company has advantages in mature processes for core products such as mercaptan methyl tin

• The industry is accelerating its transformation to environmental-friendly lead-free products (the EU banned lead in 2015, and domestic policies are promoting this transition)[3]
• Competition in technological routes for calcium-zinc and rare earth-based environmental-friendly stabilizers is intensifying

• Peer enterprises such as Jiaxian Co., Ltd. continue to increase R&D investment[3]
• There is a possibility that the company’s technological advantages may be caught up or even surpassed

• There is a need to continuously develop new auxiliary products such as ACR and ACM to expand application fields
• A decline in R&D investment may affect the launch rhythm of new products

: The short-term decline in R&D expense ratio has limited impact on the company’s technological competitiveness, but long-term attention should be paid to technological risks brought by continuous decline in R&D investment.

:

• Focus on subsequent changes in the absolute value of the company’s R&D expenses, rather than just the ratio
• Track changes in the quantity and quality of new patent applications
• Observe the improvement effect of the R&D center project on the company’s R&D capabilities after completion
• Pay attention to changes in the technological competition landscape of the same industry

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[1] Feasibility Study Report on Benxing New Materials’ R&D Center Construction Project (https://caifuhao.eastmoney.com/news/20251226114409979941890)

[2] Beijing Stock Exchange Weekly: Aishelun is about to enter the issuance stage, and 13 companies including Kailong Clean Energy are about to file applications (https://mp.ofweek.com/ce/a856714679557)

[3] 2023 Annual Report of Jiaxian Co., Ltd. (http://notice.10jqka.com.cn/api/pdf/b17c1fd445b3eb46.pdf)"